By Juan Carlos García, Country Manager, Amazon Mexico
The e-commerce sector has grown by 34 percent since 2014, the fastest growth of any industry in all Latin America. The growth has been driven by the dramatic increase in the use of smart phones and a strong consumer appetite for online and mobile shopping. This article looks at some of the opportunities available to Mexican businesses and consumers and how Amazon is contributing to that expansion.
In the past few years, Mexico has seen tremendous growth in e-commerce, expanding from $ 9.2 billion in 2013 to $12.2 billion in 2014, a 34 percent increase, according to the Mexican Internet Association (AMIPCI). eMarketer, an independent market research company, noted that Mexico is the second largest e-commerce market in Latin America—and the fastest growing due to increased Internet access through broadband connections and smart phones, a stable economy, and the close proximity to the United States.
The fast growth in e-commerce prompted Amazon to launch a physical goods store on the website, Amazon.com.mx, as part of their international expansion. The site has more products and product categories than any other launch in the history of the company, including the millions of products that are sold by Amazon from other international locations.
The latest AMIPCI e-commerce study, “E-commerce in Mexico 2015,” states that three out of four Internet users made an online purchase in the first quarter of 2015. When considering the growth of mobile Internet usage, local businesses must have strategies to build an online presence and maximize the opportunities this technology can provide. This approach must understand the hi-tech infrastructure in order to list their products online, provide payment options over a secured network, process orders, and prepare items for shipment in a timely fashion.
Having great products to sell is not enough. Considering this, Amazon also opened its Selling on Amazon platform during its launch in Mexico. This option allows businesses of all sizes to sell goods on Amazon.com.mx and offer Mexican consumers millions of additional products, giving customers more of what they want.
In order to make the whole process of selling on Amazon more convenient for Mexican sellers, the company also provides the Fulfillment by Amazon solution. This handles all the logistics of picking, storing, packing and delivering products 24 hours a day, seven days a week, and includes Amazon’s award-winning customer service on behalf of the seller.
Mexico is a large country so ensuring customers can shop from anywhere can be viewed as a challenge but being able to purchase products online that are not usually available locally is without a doubt another big advantage of e-commerce. Amazon delivers to 99 percent of the Mexican territory and offers shipping options according to customer needs and budget, from next day delivery to locations in major cities to free shipping on selected purchases.
When venturing into a new market whether it’s a continent, a country, a city or even a single location, it is important to understand the purchasing patterns of customers in that particular locale and make sure to provide the right functionality to match their shopping preferences. A clear example of this for e-commerce in Mexico is adjusting to the much lower use of credit cards in that country, much lower than other countries. When Amazon expanded its presence in the country, it was necessary to work with financial institutions to make sure debit cards were processed properly as they are used much more in Mexico than credit cards are, and that the shopping experience continued to be seamless and secure for consumers. It was a big accomplishment and an example of how you need to consider the particular business environment when opening or growing a business.
For those who do shop with credit cards, Amazon has enabled interest-free monthly installments with the vast majority of credit cards in the market. This preferred form of payment in Mexico accounts for a large percentage of big ticket transactions in the country. In addition, considering that many Mexican customers in urban areas are away from home during parts of the day, Amazon.com.mx lets customers pick up their purchases at hundreds of pickup locations across Mexico.
Further growth of e-commerce in Mexico depends on availability of the infrastructure necessary to support it including access to broadband Internet, capabilities for online payment, and guaranteeing security of personal information. Amazon’s 20-plus years of experience in e-commerce has allowed the company to perfect the data security infrastructure to keep customers’ personal information safe.
In conclusion, e-commerce in Mexico will continue to grow. Euromonitor International, a provider of independent market research, reported that Mexico’s e-commerce growth will be the highest of the entire Latin America region. Amazon and other e-commerce businesses are expanding their presence in the country and will continue to serve a growing number of the country’s online customers, providing the best possible prices on a vast selection of products, convenient delivery and a secure platform.
Companies wanting to take advantage of these opportunities must recognize the challenges and establishing an online presence requires a lot of work from a qualified team of professionals, proprietary technology, and a logistics network to make sure customers have great shopping experiences—the key driver for additional growth in e-commerce.
